LONDON: Lloyds Banking Group said an offer to bondholders who helped rescue it five years ago to swap their holdings into new debt, or cash out now in case the bonds get called at par, had been oversubscribed.
Lloyds issued the bonds, which were designed to boost the bank's capital if it ran into trouble, in 2009.
But new UK and European capital rules in force this year mean the bonds may no longer count as capital if the bank hits problems, and Lloyds warned last month it could buy them back at face value. Lloyds, 33 percent owned by the government, offered institutional investors the chance to swap the bonds for the new instruments in euro, dollars and sterling. Retail holders are being offered cash.
The bank said on Thursday offers had been accepted for 4 billion pounds ($6.7 billion) worth of the existing bonds, known as enhanced capital notes (ECNs), resulting in the issue of 4.35 billion pounds worth of new Additional Tier 1 instruments.
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